Analysis of an Auto Purchase to Drive Effective Negotiations

I recently engaged in a negotiation while looking to purchase a car and want to break down the engagement to provide some of the basics of effective negotiations. It is important to note that most business-to-business sales are much more complex than and automobile purchase, but there are still some basics that can be looked at and applied to help drive sales effectiveness.

Collecting Interests

One of the basic concepts of negotiating is to clearly identify both party’s interests. Not only do you want to clearly understand what the other party wants and needs, but you also want to clearly understand what your interests are.

When I first began spending time with this auto sales person, he did not perform a very good effort to learn about what my needs and interests were. He asked some general questions that lead to the type of car that I wanted to look at, but he could have dug deeper to try learn more about what my needs were, what the timeframe I was working against, what my budget was, what my decision making process was, what other options I was looking at.

Even though, he did not ask questions that could have helped him, I voluntarily shared information on my interests with him to help with effective negotiations. I wanted him to know that I was going to make a decision but that I did not know if it would be on the same day we were talking, I shared the budget that I wanted to stay below, and I shared some of the needs that were driving the choice of vehicle.

Trial Closing

Most sales cycles include some sort of presentation or demonstration. In this case, this activity involved a test drive of the vehicle. When delivering a presentation, one of the most important things to do is to trial close. This involves asking questions that perform a test close to figure out what the prospect’s thoughts on the solution and on the direction for moving forward.

For example, when trial closing, a sales person can ask a prospect what they think so far, what they like about the potential option, what they do not like, and what direction they would like to go. By asking these questions, the sales person will have more information to use and this can help to establish effective negotiations.

During and after the test drive, the sales person did not ask me any questions and he had very little information to work with. Fortunately for him, I knew what I wanted and liked the direction we were considering and I suggested that we look at some numbers. This was good for him as we were moving forward on my terms, but bad as he had very little control over the sales cycle.

Gaining Commitment

Closing the transaction and reaching an agreement is the most important step of the sales cycle and effective negotiations. There are clear steps that can be taken to improve close rate like qualifying, identifying a compelling event, building out a plan, and dealing with objections.

The main tactic that this sales person used to gain commitment was trying to get me to sign a piece of paper that said I would agree to move forward if we reach a price that we agree on. At three different points, he tried to get me to sign something that was an informal agreement to move forward. My analysis on this tactic is that was an attempt to increase his influence on me by getting me to increase my level of commitment and investment in the process.

I believe that the sales person should have been more focused on my interests and needs when closing instead of trying to get me to sign some piece of paper. It seemed counter productive for effective negotiations and pushed me away more than it pulled me in.

At this point, I lead the process back to the subject of interests and summarized that I have the interest of not paying full price, he has an interest in making a commission, and the dealership has an interest in making a profit. We then worked to find a solution that was good for all three parties.